The idea of providing Software as a Service (SaaS) is not a new concept. This concept was referred to as an Application Service Provider (ASP) solution throughout the 1990’s, and an ASP reseller would offer to host and maintain an application for a company on a subscription based fee. Many Software Vendors created ASP Partner reseller channels which allowed Software Vendors to provide potential and existing clients with a non hosted version of their solution or a hosted version of their solution. When this concept was introduced, one of its challenges was that many applications were still client/server applications and had only been web enabled. For many applications this caused speed and connectivity problems with regards to communication between the end user and the solution provider.
Throughout the following decade, many applications were redesigned from a client/server architecture model to a web based architecture most applications have today. The redesign from client/server architecture to web based architecture has proven to be a successful endeavor. Can you imagine upgrading a Business Management application for 30+ end users? You would be required to upgrade/reinstall the client application on 30+ workstations, which in itself would be a time consuming task, and for those who recall, you would have also encountered communications issues and/or workstation capability issues which would require some time consuming troubleshooting to resolve the issues. Web based applications require a simple upgrade/reinstall on the application server. Once this is accomplished, end users have instant access to all the new version functionalities.
As an overwhelming majority of applications became web based just prior to Y2K and moving forward, we saw the reintroduction to the newly named “On Demand” applications being offered by software vendors. The software vendors created “On Demand” Partner reseller channels which, once again, allowed software vendors to provide potential and existing clients with a non hosted version of their solutions or a hosted version of their solutions. Once again, the “On Demand” applications faced new challenges in this decade, for example best practices for IT departments such as ITIL and methodologies like Business Service Management (BSM) forced organizations to review Total Cost of Ownership (TCO) and Return on Investment (ROI). In many cases, the “On Demand” version did not offer enough substantial cost savings compared to the non hosted versions.
This past year and a half, we have seen the reference to Hosted applications rebranded as Software as a Service (SaaS). This concept is not new and it will face many new obstacles prior to its acceptance, but many of the previous challenges have been removed. For more on this subject, look for our upcoming post “Software as a Service (SaaS) – is it right for your organization?”
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Posted by: Robert Beauchamp, President/CEO RJR Innovations